An official grievance was filed Monday with the Federal Maritime Commission in the United States against the Port Authority of the Cayman Islands by Malvar Freight Forwarding Service of Miami.
Malvar’s complaint, lodged by the law firm Herrick Nikas, alleges it is ‘experiencing unfavourable shipping conditions with the Cayman Islands as a direct result of their subjective practices.’
The issue relates to a Port Authority ruling of 23 January in which it decided it would no longer unload Less Than Container Load containers shipped by Caytrans Ltd.
An LCL is a container shipped less than full of a single shipper’s goods, and refers to all containers, full or not, that hold the goods of more than one consignee.
The Port Authority’s ruling concerning LCL containers shipped by Caytrans affects Malvar directly because it uses Caytrans’ services to ship cargo to the Cayman Islands.
Owner Diane Malvar said her company has been doing business with the Cayman Islands for more than 35 years and has dealt with thousands of individual customers during that time.
The grievance says Malvar has an estimated income from its shipping activities to the Cayman Islands of $40,000 per month, which is jeopardised by the Port Authority’s decision.
‘We could lose millions of dollars as a result,’ she said. ‘This could be devastating on my business.
‘Malvar’s clients are refusing to conduct business with it as a direct result of the (Cayman Islands) Government’s refusal to unload its containers upon arrival at the port,’ the filed grievance said.
The grievance asks for the FMC to ‘intercede to protect the economic interests of the US shipping public and US international trade.’
Last Friday, Leader of Government Business and Chairman of the Port Authority McKeeva Bush made a statement to the Legislative Assembly about the dispute with Caytrans, whose Managing Director is businessman Billy Adam.
Mr. Bush outlined a number of difficulties caused by Caytrans’ shipments for the Port Authority, including improper documentation.
He also said Caytrans’ LCL containers are not usually palletised, and have to be, to a large extent, ‘unloaded by hand, which is very time-consuming.’
The Port Authority has to collate, palletise and shrink wrap Caytrans’ shipments, Mr. Bush said, adding that those services are not provided for any other shipper.
As a result, Mr. Bush indicated the Port Authority spent an inordinate amount of time unloading Caytrans’ shipments.
‘Caytrans’ business translated into 14 per cent of all LCLs, but the discharge process took 40 per cent of the time spent by the Port Authority in discharging all LCLs,’ he said.
Mr. Bush said the Port Authority does not charge Caytrans for the unloading services.
‘It costs the Port Authority about $430 extra to handle on Caytrans container,’ he said.
The decision to no longer unload Caytrans’ containers came down to business, Mr. Bush said. ‘It is perhaps simply a matter of economics; the Port Authority was being used to do this extra work and it is being done free of charge.
‘Things have changed since Hurricane Ivan and the Port Authority has had to change its business plan,’ he continued. ‘We can no longer dedicate a disproportionate amount of resources to a specific customer, at the expense of 86 per cent of our customers.’
Contacted in New York City on a business trip, Mr. Adam refuted many of Mr. Bush’s statements.
Mr. Adam said Mr. Bush was wrong to state Caytrans was an importer.
‘We are not importers,’ he said. ‘We are an internationally recognised non-vessel-operating common carrier, or NVOCC.
‘Caytrans subleases space on a vessel,’ he said. ‘It is very common throughout the world.’
Mr. Adam said the consignees of the cargo in the containers are the importers.
As for the difficulties caused by Caytrans to the Port Authority, Mr. Adam said Caytrans’ LCL containers were no different than other LCL containers arriving on the island through other shipping companies, which include Thompson Shipping, Seaboard Marine, and Shelby Agency, which runs an NVOCC service from Tampa to Cayman.
Mr. Adam admitted there have been some problems in the past with documentation, ‘but no more than any other carrier.’
Caytrans palletises its cargo where appropriate, Mr. Adam said.
‘From our observation at the port, the percentage of palletised cargo in a Caytrans or other LCL container was about equal,’ he said.
Mr. Bush had also said Caytrans’ containers often held items like steel and lumber that would normally be shipped on flat-racks, rather than inside containers.
Explaining that flat racks are out in the open and subject to ocean spray, Mr. Adam said all of the other Cayman carriers had sometimes been putting building materials inside containers, up until the time the Port Authority sent them all a letter on 2 February telling them they could not do so any more.
As for not charging for the unloading services, Mr. Adams said this was not true, and pointed out that consignees pay the fees, as directed by the Port Authority law.
‘On a 40-foot container, the Port Authority collects over $800,’ he said.
Mr. Adam said he had requested the Port Authority provide a statement of the time it took to unload one of Caytrans’ containers, but had not received it.
‘I’d like the Port Authority to provide proof of its claims,’ he said.
Caught in the middle of the squabble between Caytrans and the Port Authority, is Malvar, who thinks the container unloading should be done by the Port Authority.
‘There’s no reason for them not to do that work,’ she said. ‘That’s what they’re there for.’
In the end, Ms Malvar said her Cayman Islands customers will also suffer from her not being able to ship through Caytrans.
‘We’re the ones who offer better prices for shipping,’ she said.